Cloaked Raises $375M for AI Privacy Expansion

In a significant move to bolster digital security amidst escalating AI-driven threats, privacy solutions provider Cloaked has successfully closed a $375 million funding round. This substantial capital infusion, comprising both Series B equity and growth financing, is earmarked for enhancing its consumer-facing offerings and aggressively entering the enterprise market.

Founded in 2020 by brothers Arjun and Abhijay Bhatnagar, Cloaked initially focused on empowering consumers with the ability to generate distinct digital identities, including email addresses, phone numbers, and passwords, for various online services. This strategy aimed to shield users' core personal data from direct exposure. Over time, the company has broadened its suite to encompass data removal services, identity theft protection, virtual private networks (VPNs), and dark web monitoring, demonstrating a comprehensive approach to personal digital safety.

The company's strategic pivot and substantial funding are driven by the rapidly evolving threat landscape, particularly the increasing sophistication of AI in facilitating scams and data breaches. Arjun Bhatnagar, CEO of Cloaked, highlighted the critical need for advanced protective measures, stating, “We’ve observed AI surpassing human capabilities in compromising individuals. This presents a significant challenge to personal and financial safety, amplified by the proliferation of AI-powered scams and phishing. Our solution bridges the gap in this surveillance-heavy era, and we are seeing strong traction on the consumer front.”

Looking ahead, Cloaked plans to leverage its AI expertise to extend protection beyond voice calls to include text messages, emails, and web browsing. A key development is an AI agent currently in testing, designed to autonomously manage security actions like password resets for compromised accounts, all while prioritizing data privacy by avoiding cloud transmission of sensitive information. The company reported an impressive tenfold growth last year, serving over 350,000 paying customers and safeguarding 10 million identities, with over 1 billion data records removed from broker sites. Its AI call screening feature alone has processed more than 50 million spam or scam calls since its launch.

The expansion into the enterprise sector will offer businesses a unified platform to protect their employees with similar identity and password management tools available to consumers. This B2B offering will provide employees with scam alerts and equip CISOs with aggregated risk assessments and insights into potential company-impacting threats. With a team of nearly 70 employees, Cloaked intends to scale its operations across product development, engineering, enterprise sales, and international markets.

This latest funding round was led by General Catalyst and Liberty City Ventures, with significant participation from Lux Capital, Human Capital, Marquee Ventures, Fifth Growth Fund, NFL Players Association, LG Technology Ventures, Assurant Ventures, and DuckDuckGo. Notably, General Catalyst also contributed growth financing through its Customer Value Fund, a non-dilutive capital source aimed at accelerating customer acquisition. Prior to this Series B, Cloaked had already secured over $29 million in funding.

Mark Crane, a partner at General Catalyst, expressed confidence in Cloaked’s trajectory, having invested in the company across all its funding rounds. He emphasized the platform's adaptable nature, catering to diverse consumer needs for privacy and security in an increasingly AI-driven digital environment. The comprehensive suite of services positions Cloaked as a vital tool for both individuals and organizations navigating the complexities of modern online threats.